Hello and welcome to Fiskars Group's Get to Know Vita Investor event, hosted live here from Copenhagen, Denmark. I'm Noora Huttula from Fiskars Group's Investor Relations, and I'm happy to share with you our exciting agenda for today. First, our Interim President and CEO, Jyri Luomakoski, will give some opening words as well as an introduction to Fiskars Group. Our CFO, Jussi Siitonen, will then tell you more about our brand-first way of operating. After this, we are excited to introduce you to Daniel Lalonde, the CEO of Vita, who will tell you more about Vita and its role as a leader in high-end homeware. After these presentations, we will have time for your questions. We will take questions here from the audience, and we will also be taking questions from the chat online. You can already type in your questions in the chat during the presentations.
After the Q&A session is finished, we are excited to have a panel, and we will let our creative directors take the stage then. With that, I will hand over to Jyri.
Thank you, Noora. Warm welcome from my side also to Copenhagen or online. Briefly introducing myself, my name is Jyri Luomakoski. I'm soon two weeks in this office, in this role, not in this physical office, but in the office of the Interim President and CEO of Fiskars Group. Not starting completely from scratch, I spent nine years in the board, chairing the audit committee, and the last seven years I was the Vice Chair of the board. In my background, I have been CEO of a similar-sized public company in Helsinki for shy of 13 years, and that was between 2008 and 2021. Pleasure to be in this exciting role. It's an interim role, as clearly communicated, but now great pleasure for me to introduce you to our context today, really with Fiskars Group.
On the left-hand side of the slide, you see our two brands in our Fiskars business area. Obviously, the oldest brand, 1649, so 375 years and a few months type of a track record with the Fiskars brand existing and Gerber on the outdoor side. Today's focus is really on our Vita brands. Here we have listed just six, the biggest ones, and you will hear so much more today from Daniel on those brands and then later on from our creative directors. This is really the context focused on the right-hand side of this slide. These brands have all a big history legacy, and they are authentic. They have craftsmanship behind them. It's not created with AI in the back office and then kind of ordered from somewhere.
You will be able to see those who are today here in Copenhagen also physically how these amazing pieces are created with the craftsmanship. That is today the two Danish-based Georg Jensen and Royal Copenhagen brands will be more visible. Obviously, we have Wedgwood in Barlaston, Stoke-on-Trent, Waterford in Ireland, and Iittala, which is, I think that's often the home of mouth-blowing world championships in glassmaking. I believe often the winners also come from our team. That is one of these authentic brands with heritage, but really the substance also in here. Finally, on our global presence, we are still about half of our business is in Europe, 30% in North America, and APAC accounts for 20%. Here you see with the different colors and bullets where we have own operations and where we both for Fiskars and for Vita.
This was just the right quick introduction into today's topics, and I'm happy to hand over to Jussi Siitonen, our CFO. Jussi, please.
Thank you, Jyri, and good morning everyone. Actually, we have been on this brand-first journey already quite some time. We started to emphasize more in our communication some couple of years ago, and today, over the next few slides, I will explain to you what it means in practice. As said, this has been a quite evolving mindset what we have had when it comes to this brand-first. Some five years ago, the organization was quite different. It was very matrix. It was very function-driven, and business areas' role in this model was more to be responsible for product, to be the product owner. We started to change the model already so that in 2023, the port BAs, Fiskars and Vita, they had their own full P&L accountability. At that time still, we had some scalable platforms. We had scaled a go-to-market organization.
We have scaled supply chain organization, and then we have digital and IT, which was shared with BAs. Today, we are in the model where those two BAs, Fiskars and Vita, they are fully independent operationally. They have their own operational CEOs in place. The group role has decreased a lot. Actually, 95% of our employees, over 95% of our employees, they are already either in Vita or in Fiskars. Group business services, what we still have here, they are mainly delivering efficient services for those two BAs. We are talking about finance. We are talking about IT type of things there. The group role, less than 1% of our employees being here in the group. It's mainly taking care of capital allocation and then keeping some centralized function still what we have, being treasury, being taxes, being cybersecurity and the likes.
We are already operationally running two independent BAs. Having said that, what's still left is that within the next less than 12 months, by end of Q1 2026, we have also a legal entity set up together with the IT supporting that one in place so that by end of Q1 2026, both BAs should have also their own legal entity set up. The reason why we are doing this is that we firmly believe this is the model we can accelerate our speed of execution. The whole model is based on the following four building blocks what we have in place. First of all, full business accountability, both BAs having end-to-end responsibility with improved flexibility and speed. They can decide their own operations very independently from each other. The second building block is this transparency and measurability.
Transparency meaning that we are very transparent internally when it comes to target setting for those two BAs. We are also very transparent how we are allocating capital to certain brands, to certain BAs. Then also when it comes to cost allocation. We are moving from cost allocation to direct costing in those two BAs. Externally, what this means in practice is that also when we are reporting the performance of Vita or Fiskars, we are far more transparent. One practical example is that now in Q1 this year, we started to report gross margin by BAs. Of course, when we have total separation completed, most likely we start reporting also some capital efficiency type of things by BAs. Increasing transparency. Alongside our brand-first strategy, we have also sharpened our portfolio logic. Brand-first strategy and portfolio logic, they go hand in hand.
When it comes to this portfolio logic, their target is to improve group profile. It is built on the following five principles. First one is that we are making big brands bigger so that they really move the needle at the group level. We are investing there because we see that they have the best return available. Second principle is that we believe that we can surround the consumer much more holistically, expanding our categories. We take ourselves out from the traditional categories where we have been playing in and moving to categories where we see that the consumers' habits and practices are also in place. Thirdly, we are focusing on high-end positioning and strong gross margin. We believe that improving gross margin is the best driver there for value generation. We are moving towards desirability.
What we want to have is that our brands are more desirable. That is together with expand our direct-to-consumer. Today, when we are talking about Vita, Vita is the one where we have our direct-to-consumer business. Expanding that one, we believe that we can have much better pulse on consumers' habits and practices. We can control the branded space, and we can act faster when we see changes in the trends. The fifth one demonstrates sustainability leadership. We believe that we can be even more transparent with these portfolio choices, that how we can improve our sustainability. When it comes to matrix, how we see the brands. When I said that we believe that making big brands bigger, they are further leveraging the profitability. When we talk about Vita, Iittala, Royal Copenhagen, Georg Jensen, and Wedgwood are the ones where we continue investing.
We see the biggest potential there and also that their relative performance is expected to even further improve. Having said that, we do not forget our maximized brand, in this case Moomin. We do not forget our optimized brand, Iittala, Waterford. And then we have plenty of tactical brands, which helps us to complete our offering to our customers. Is it then Arabia? Is it then Rörstrand, Royal Albert, or Royal Doulton? We have already some proof points in place showing that this matrix works. One is that we have now a very good Royal Copenhagen growth path in place. When it comes to maximized brands, Moomin has proven to improve there both on profitability as well as growth by category expansion. One thing where we are very pleased with is what is happening there in Iittala.
One year after the brand renewal, what we had last year, we are not only growing top line in Iittala, but we have also succeeded to improve gross margin, which has been the target of being there in optimized brand. Brand-first portfolio choices or portfolio logic there, this model allows us to better manage also our P&L structure. What you can see here is our 2024 numbers by BAs. As you can see, I'm now focusing here on Vita. You can see Vita with almost 57% of gross margin. It starts to be the level what we have targeted for Vita. Having so much exposed to direct-to-consumer business, you can see that actually when we talk about cost part, almost 50%, 49%, that's demonstrated to high share of direct-to-consumer. This means that the growth is the key.
That is why we are talking so much about growth, because improving growth or accelerating growth, reigniting it, is the way to get this model work for Vita. When I'm talking about growth, you can see it here. What you can see here on the left is our rolling 12-month net sales from the past three years. The orange curve here is the organic one, excluding Georg Jensen acquisitions. You can see that we have been on a declining trend there already quite some time when it comes to Vita. The positive side, however, is here on the right, the gross margin improvement. We have succeeded to improve our gross margin over 200 basis points, 230 basis points in the last three years. Even though we have improved gross margin, it is not yet enough to mitigate the top line trend there. The key takeaway is simple.
We need to reignite long-term growth here in Vita. Before handing over to Daniel, let me touch on one tactical point here, because we can't avoid discussion regarding tariffs. We have said that Fiskars Group is exposed to U.S. tariffs due to the fact that 30% of the group sales is coming from the U.S. However, that's mainly there in the Fiskars BA side. In Vita, only 10% of sales is coming from the U.S. Those direct impact of tariffs is, I would say, if not easily, they are quite manageable there in Vita BA side. When it comes to indirect impacts there, you can see that actually Vita business is so much focused on year-end so that Q4 is more than one-third of net sales. When it comes to EBIT, 70% of EBIT is delivered in Q4. This gives us a bit luxury of time.
When we start seeing those indirect impacts, the Vita team, the group has time to react and get mitigation actions in place before we are in those peak seasons for Vita. Having said that, I'll hand it over now to you, Daniel, to share your thoughts about the long-term growth potential.
Thank you. Thank you, Jussi. Good morning. Good morning to everyone. Told we have to look into the red light camera, so we're looking into the crowd today. I had a pleasure to meet some of you just before. What I wanted to talk about today is obviously Vita and our portfolio and a little bit on our thinking, on my thinking on the way forward. Let me just begin with myself. I do not think I need to spend much time on this as I think it has been published and announced a few weeks ago. My experience, I am five weeks into Vita today or this week. My experience is mainly in luxury goods, fashion, and high-end design brands. My last role was at Flos B&B Italia Group with a wonderful Danish brand called Louis Poulsen, was part of our portfolio as well.
I've had different experiences, fairly global as well. Lived most of my life between, I'd say, New York and Paris, a little stopover in Milan and also Switzerland for Nespresso a long time ago. That's who I am. More importantly, let's talk about Vita. Vita at a glance, we have a very unique and incredibly rich portfolio of brands. If you look at our company, you split by brand. Here, not much to say other than we have a well-balanced portfolio by brand penetration. Georg Jensen is our biggest brand, followed by Royal Copenhagen and so forth. You see the penetration by brands. Other brands, as Jussi mentioned, Rörstrand, Royal Doulton, make up that others. EUR 605 million business last year. By channel, 50/50. The D2C channels are 50% of our business. This is good.
This is great because we can control the customer, the consumer experience in these channels. As you know, these channels are, there's four sub-channels here: freestanding stores that we have in global capitals, concessions, mainly in department stores where we benefit from the traffic of the department stores. We have factory outlets as well, or outlet stores, and our own e-com stores as well. That's what composes the 50% of our business. On the wholesale side, it's mainly what we call the indirect. We own roughly 500 stores, physical stores worldwide in that configuration. Last, just split by geography, we're present in 80 countries worldwide. As you can see, mainly skewed in Europe. A fairly large position in Asia. Japan is a very important market for us. Japan and China would be our two most important markets in this region. That's good.
Then only 10% in the U.S., so that is in the Americas. That is clearly one of the growth initiatives that we will embark on for Vita as well to make that part of the pie a little larger. Jussi, you tell me if I am, when I am saying things I should not say, forward-looking. I think so far so good. About our brand portfolio, we have an incredible brand portfolio. Part of the reason that attracted me to join this role was the heritage of our brands. Every day I have new surprises with the richness of our archives. It is just incredible what we have in terms of content and the potential to grow. A little play-by-play of our brands. I will not take you through all of them if I focus on what makes them different.
We play in a lot of categories in the homeware industry, homeware segment. Here we play in the table, glassware, icons that you place throughout the home, textiles, etc. Obviously, Georg Jensen, where we are today, is our only brand that is really playing in another category, the jewelry category. It sits on two pillars, the homewares and jewelry. All our brands have incredible, incredible icons that you just look at the product and you know what it is. They have been passed on through generations from generation. Very strong, iconic products. These are just some examples. The Alto Vase obviously that you all know exceptionally well. Again, in all brands. This is very rich and not easy to achieve. Each brand has a lot of history. Our oldest brand, I think, is Wedgwood, 266 years old.
This year we're celebrating 250 years for Royal Copenhagen. Great. Each brand has a founder, a founding moment, history, very rich history, codes that define the brand. That's so important. That's very difficult to obtain. Our brands are incredibly rich. I feel very privileged for working with all these brands and making them even bigger and stronger in the future. Because of our brand portfolio and the brand strength, we attract incredible global designers that have worked with our brands, that have worked in the past, today, emerging new designers. Here, I won't cite all the names. Arne Jacobsen, incredible designer. We have a lot of products at Georg Jensen as part of that collection. Alto as well, of course, Zaha Hadid, etc. I won't name them all, but our brands are so desirable that they attract world-class designers.
That's part of the way forward as well as we cultivate the preciousness and the desirability of our brands. Our brands also, and I've had the chance to visit in my four weeks, our operations were here, of course, in Copenhagen, Georg Jensen, which you'll see later on today, the painting in Royal Copenhagen, Wedgwood. I was there last week. We have an incredible and Iittala, of course. I can't forget Iittala. I was at Iittala. Incredible skills and artisans in glassblowing. We have these incredible archives, incredible archives that I've discovered in my journey. A lot of them we have yet to bring to market. Now, we won't bring them all, but there is a source of inspiration for wonderful and talented creative directors to bring some back and get inspired from the past.
Just a few examples here of where archives are, but we have a treasure chest. I really call this a treasure chest of archives that have developed over the many, many, many years. Our brands are unique for many reasons. First, the heritage, and I have described that a little bit. I also wanted to describe a little bit why they are unique in terms of the design process. Each brand has a creative director and a creative team. Set up a little bit like luxury and high-end design companies and brands. We also have invested in what I call R&D. We have teams on new product development that work with the creative teams and prototypes, 3D printing, etc., to really accelerate the design process.
Each brand has this capability, which means that we have a lot of creativity that can be tested and brought forth to the market and time to market as well. We can go faster on the design process than if we outsource this part of our business. That is a real strength for me. Last, the craftsmanship. We have incredible craftsmen or people in our company, and we were able to perpetuate these skills and this trade from generation to generation. You will see that in the silversmithy today. Our brands are, in my view, very, very unique. We also play in the key markets in the world. We know these markets. We know the Americas. We know Europe. We know Asia because we have teams that are there. We have stores in those markets, and we understand the consumers in all these markets.
Now, not all our brands have this global nature, this experience, but if I take the cumulative ecosystem of our brands, we understand these markets, which is really important. We have a proof of concept in all key markets globally. We have roughly 560 direct points of sale, including e-com, and then cumulatively among all the brands, around 600 wholesale doors or accounts. These are doors, actually, not accounts, worldwide in different areas. This is great. We're starting with a very strong knowledge of the local consumers, the global consumers, and we have proof of concept in those markets. Now, what industry do we play in? I thought it would be important for all of us and for all of you to frame a little bit what industry we're in.
This is a study that we've been inspired by Bain & Company and Altagamma in Italy that first, on the left-hand side, defines what they call the global luxury industry. Luxury is a big word, but they define it as a EUR 1.5 trillion business. Many parts, many categories. If you look at the largest one, it is the luxury cars, private jets, and yachts. That's estimated to be a roughly EUR 600 billion sector. The ones that I would describe, personal luxury goods here, EUR 363 billion, those are your fashion brands, Hermès, Dior, Chanel, etc. Also included in the EUR 363 billion, the watches and jewelry part. More particularly, I think I want to focus on the jewelry side. The branded jewelry market is about a EUR 30 billion market in there. What we're interested in is framing our industry.
The high-end homeware segment, which is where we play more directly, with the exception of Georg Jensen in jewelry, is about EUR 6 billion market worldwide. Within that segment, bless you, within that segment, Vita is the global leader. We are the global leader in the homeware, the global homeware high-end market. We have an estimated market share, let's say, anywhere between 15-20% of this market. Now, what's interesting, there are two points I want to make here. The first is that the consumers of the other industries in luxury are our consumers as well. They are connected. We have a lot of design, high-end design furniture, customers that buy our products, hospitality as well. We are in a lot of high-end restaurants, hotels. There is a connection among all of them. Within our pure segment, we are the absolute market leader.
Our goal clearly will be to grow the pie of the high-end homeware sector, make it bigger, and then obviously take more of the pie for Vita. Those are our objectives. Now, there are trends impacting the luxury industry, but more specifically the high-end homeware segment. There are many more. Ones that I wanted to share with you today are a few. The first is cocooning. I talked to you about it earlier this morning. What does that mean? It means people are spending post-COVID more time at home, all of us. We spent a lot of time just post-COVID, a little bit less now, but much more than before. We are spending more time at home, and we've all had an effort, not all, but a lot of consumers to beautify their home.
You had a new kitchen area because we cook more often at home, your workspace, embellishing your workspace, creating maybe a spa concept in your bathrooms, etc., etc. We have invested a lot at the home, and spending time at home is more important than it was in the past. This is a positive trend. Second is the rise of experiences in and outside of home. Here, what we are seeing in the market is, I would just frame it, has anyone tried to get a reservation at a high-end or a great restaurant recently? You have to wait a couple of weeks. It's hard. It's hard. The whole hospitality industry, high-end hotels, restaurants, and other experiences have grown tremendously and are very relevant today. I think that helps our sector. There is also a convergence of luxury market.
Some of the luxury players I cited in the pure luxury space are entering our market, the homeware segment. Is that good or bad? My belief is that that's great because it makes our segment bigger and gives more exposure to the homeware segment. That is happening, and we've seen live examples of that. The last trend is there's been a very strong premiumization of gift giving. Gift giving has grown tremendously, and high-end gifts are a big part of that as well. I think that purports very well for our segment, which a lot of our brands are incredible gifts to give. There are some tailwinds behind this homeware segment in the future. Those are just some of them that I wanted to share with you today. How we can grow.
We have incredible untapped potential in our brands, and we've already earmarked some paths of growth either by categories. I'll show you a couple of examples right after this, channels with a focus more on D2C and geographies as well. As I said, we're present in 80 countries, but if you look at it brand by brand, there's great opportunities to grow in some really important potential markets where we're not present today. There are synergies among the brands. This point I wanted to make is that for me, what's incredibly important in having a portfolio of brands, we are stronger by having a portfolio of brands than having a single brand within this category. We're going to use all those benefits of being a portfolio. Some examples that come to mind.
First, we could benchmark across the world and share that within or among the brands, what markets work, what markets are tougher, what's the route to market for different markets. An example is in Korea, which is a really important market. And as you know, the Japanese and Koreans just love Nordic design. They love Nordic design, both Finnish and Danish design. Here, Royal Copenhagen is very strong in Korea, but Georg Jensen is not as present in this market. We can have that synergy by having our brand leader in that market help one of our other brands develop this route to market and avoid any pitfalls and come from learnings that we've had. That is very synergistic. Also, we're able, because of the size that we have, to invest in technology that, as a single brand, we wouldn't be able to do.
There are many benefits. My point is that there are many, many benefits of being market leader and having a portfolio of brands. Some recent examples on each of the streams. On the products, a lot of our brands have started an approach to add some new categories. This is great. One example is Royal Copenhagen is launching textiles very recently, so round the table. I think that's an important development. Some of our other brands are launching those as well. We're getting into textiles, which is very connected to our industry and our sector. There are logical brand and category expansions. Georg Jensen opened a beautiful flagship store that I saw last week in London. Another way to emphasize and accelerate our direct-to-consumer experience.
One example of working with a KOL in China has 30 million plus followers as part of the Wedgwood acceleration in China, which is their largest market. We have, again, tremendous potential for growth, both on product, new product categories, channels by acceleration in D2C, and also in geographical expansion, but not too much. I don't want to do every brand will have their own growth strategy. It's not the same recipe for all brands. Our brands are at different paths in their maturity and their growth. It's important to develop these growth strategies brand by brand. There will be a common fil rouge thread among, but I don't want to skip some steps for each of the brands. That's it in a nutshell.
I just wanted to give some highlights of Vita and, most importantly, to say we are the global leader in this segment, and our goal is to grow the segment and our share within the segment. Thank you.
Great. Thank you very much, Daniel, for the insightful presentation. Actually, next up, I would like to invite back on stage Jyri, Jussi, and Daniel for the Q&A. We will start the Q&A shortly.
There you go.
Great. We now have everyone here ready for the Q&A, and we already have some questions here in the chat, but you can keep on typing them as we go. Perhaps to start with, we could take questions from the audience. You could just raise your hand, and someone will get you a microphone to get your question to. Yes, here at the front row. Yes. Maria Wikström from SEB.
I think this question is directed to Daniel, and I wanted to hear your thoughts. Why hasn't tableware been a segment for these luxury brand houses before? Now we talked about brand extensions for existing brands, but so far, Louis Vuitton's and Richemont's, I mean, they haven't had a separate segment for tableware.
Yeah, that's a really good question. Shall I stand or sit?
You can do whatever you feel comfortable with.
I'll stand. Okay, fine. Thank you. That's a really good question. I think for a few reasons. The first point even to add to your question is they are now stepping in. We're seeing that there's efforts to step into the houseware, homeware category, tableware. I think it's a segment that brands have maybe not sufficiently invested in to develop scale in the past. I think the industry has grown slower than other luxury industries.
I think it's a matter of investments. I think perhaps the industry hasn't sufficiently adapted to the new behaviors of consumers. Because if you look at it from, I want our company to be very consumer-led. We have to start with the consumer first and work our way back up. Things have changed. Wedding ceremonies, you don't register like you used to and say, "Just get me all of these." People do it very differently. I think we need to be much more consumer-driven as an industry as well. I think investment, consumer-driven. It's an industry where if you look at the top players, of which most of our brands are part of the top, we're very strong in a few local markets, but the industry players have not scaled globally. The local home market is still a very important part of brand sales.
I'm talking generally about the industry. I think globalizing our industry is, it's now. This is what I want to do. We haven't made it global. We haven't scaled on a global basis, maybe haven't invested enough to develop the brands because the heritage is just incredible. I think we need to be much more consumer-focused than we have in the past. I think if we do all those things, and we will do those things, we can grow this segment. Luxury brands are investing a lot in it, so they've identified the opportunity. Most of luxury brands have also invested in hospitality. They own hotels now. They own cruise ships, etc. This is an industry I think that they're going to begin investing in. We are the authentic brands, and it's up to us to build this industry.
In your presentation, you mentioned four, I think, mega trends you identified, I mean, four sources of future growth. I think one mega trend, what I hear from many companies, is convenience. I think that counts also to eating out. You mentioned cocooning, but then sometimes I'm thinking if that's just like a sauna going and then you go and eat outside. Is there any thoughts for you that, I mean, how would this convenience trend impact the future demand of tableware?
Yeah, convenience in what sense? Can you help me with that?
I think, I mean, for example, in the U.S., I mean, before COVID, the size of the restaurant and grocery market were equal, and now the restaurant market is much bigger. If people just eat out more than they eat at home.
Yeah.
We want to capture them in their home and outside their home as well. I think that will be part of our approach as well as approaching the high-end hospitality industry. We have partnerships with some meaningful airlines, with some meaningful hotels and hotel chains. We have an opportunity to capture the consumer not only in their home, but when they go out. I think that's very, very important for us and will be part of our growth strategy. In terms of convenience, I think our products lead themselves very well in the homes, indoor to outdoor. As I mentioned, I think on the brand category development, we're looking a little bit larger than just the tableware and the glassware, but textiles, which is a very interesting segment, maybe home sense. Looking to develop other categories around the home to create an overall experience.
Is that more convenient? I think we want to make also the approach to purchasing our products very convenient as well. E-com has been a great enabler for us, but I think we'll keep emphasizing the D2C channels because also it's important that we provide the right experience as well. Maybe that goes to your first question, why that hasn't grown enough, is I think we need to show that experience of the brand, the portfolio, the heritage, craftsmanship, and tell those stories because they're very, very rich stories that very few brands have. I'm not sure enough consumers know about what happens here, how we make products. There's a lot to do.
Thank you. Happy that I get to see it later.
And then my final question, I kind of hope that one of my colleagues would ask it, but I'll just go ahead and it will be directed to you, Jyri. As Fiskars recently changed the CEO, and I think it came as a surprise for quite a few of us. If you could a little bit enlighten us, I mean, for the reasoning of a recent CEO change, please.
I think I'm a bit the wrong person actually to answer that. Of course, at the time of the change, I was a member of the board and still at that time was Chair of the Board. The company and the CEO mutually agreed that now it's a good time to take a change. Obviously, there are many things that have happened, like the split of the businesses into operationally independent units or business areas.
Now, Daniel just has joined, which was also a position that at interim, my predecessor basically held, the CEO of Vita role, which mid of the month you joined. There were many factors leading to that. Not much more to fill in. It's all been printed into the stock exchange release.
A question to Danielle. I know you are quite new in the organization, but I will ask the question anyhow. We could see in the slide that 85% of the Vita turnover comes from six brands. That means that there's 15% left with the other brands. Will all those brands survive, or will good old capital allocation mean that some of them might not survive?
Okay. There's more than the two I cited in the other category, the 15%. They will survive. They will survive. They will be, for me, all brands are like babies.
They're all important. However, these tactical brands, as you mentioned, we can't allocate resources to all the brands equally. They have a tactical role. In some markets, Royal Doulton, for example, is very strong in some markets. I think Australia and some other key markets. We will continue to develop the brands in those markets, but in terms of resource allocation, very tactically. A little bit less investment at this point in time than we would allocate to some of the brands I mentioned here. They will not go away. I think we'll just play them tactically and prioritize investments in some of our brands that are ready for investments and that we feel have the most potential to scale. They'll still stay.
Actually, there's a bit of a follow-up here on the web browser. We have a question on tactical brands.
It mentions that we have several tactical small brands. Would any of these have the potential to graduate into other portfolio roles in the future?
The answer is yes. First, one of my biggest roles is prioritizing, period. I have many brands. We play in many markets, and we play in many channels. The focus for me and the teams are to determine what are the key priorities for each brand and where we allocate our resources behind these brands. There is a lot of low-hanging fruit as well. This is clearly a short-term priority. Can these brands become investment brands in the future? Yeah, the answer is yes.
I want to first focus in the next years on the brands we mentioned, the five or six larger brands, because we feel today that they have the most potential to scale, scale both on top-line growth, but also profitably as well. They can make it one day. It is just a matter of timing. Yes, another, yep.
I understand your answer, but I would just like to say one thing, and that is that I am sure the CFO also has a target for the margins you have to achieve in the division. I assume that getting a higher margin is still an important task for you. Therefore, small underperforming brands might be an issue at some point?
Okay. That is a good comment. They are not necessarily less profitable, some of them, some of the smaller tactical brands. I agree with that lens.
We are embarking, and we have embarked, I'm sure you see over the many years in profitable growth. Clearly, that's where we want to invest in, in the markets, the brands that are accretive, the markets that are accretive, and the channels that are accretive as well. Even within D2C, there's some channels that are more accretive than others. This is a strong focus for me as well, is I don't believe in flagship stores only for branding. My learning has been, no, they have to be profitable. In fact, flagship stores should be more profitable than other stores.
I think all that we do will take through an investment through a lens of an investor saying, "Here, we allocate capital, but what is the return on investments of these initiatives that we're funding as well?" I think it's really important to fund very profitable growth going forward. These tactical brands are not necessarily unprofitable. If they are, we will have another lens at that.
Yeah. When CFOs mentioned, may I also comment here. When it comes to our portfolio logic, tactical brands, they do have a big role also there. They are locally relevant. Take example like Arabia or Hackman even, which are very famous and well-known in Finland. Also that when we are changing the brand profile there, lifting up brand, most likely we need to make some channel selections there. Withdrawing one brand to a certain channel.
However, we don't like to leave business on the table. For this kind of customer, we're saying that, "Okay, if this is the brand you might not get, we have plenty of other brands here we can offer you." In many cases, our customers have been very happy of having some of those tactical brands instead of some of our premium brands.
Calle Loikkanen from Danske Bank. A couple of questions, and maybe starting on the growth side. You explained the market growth drivers and then obviously the kind of pockets of growth for you. I was wondering about the kind of rate of growth now that you're coming in from the outside of the company. With your background, what sort of growth do you see for Vita? Perhaps looking three to five years ahead, what sort of growth would you be happy with?
What sort of growth would you be unhappy with?
Let me just say one thing. I can't answer that question, of course. That is a good try. That is a good try. I can't get grounded. I've got, you see, an Jyri behind me. Also, we want to be careful about what we say forward-looking. Good growth, good profitable growth clearly would be something we're striving for. Maybe I can nuance it by saying the rate of growth will be most likely different by brand. Again, I don't want to apply the same recipe for all brands because they're at different stages of their lives, of their development. Some brands may have more potential in the shorter term that we can see either from a geo point of view or from a category point of view.
It will be a balance and prioritizing the investments on brands that we see can have the most growth potential. This is what we want to do. Can't really say how much. I'm sure you're not surprised today, but clearly we want to. It's been also the industry has been in the past two years has been a little bit had tailwinds. Not only in our sector. If you look at the whole luxury sector, it's been a tough couple of years, particularly last year. I think Chanel just yesterday announced -4% in their first quarter, which has never happened to them. I think the high-end consumer, there's been a little bit of headwinds in the past. We see that dissipating in the future as well a little bit for the reasons I mentioned. Good profitable growth is all I can give you right now.
Okay. How about then the market? You show the market study or the market figures like the $6 billion high-end homeware market. What speed is that market growing?
It depends. It has historically. If you look at the CAGR for the past five years, I think some of the industries have grown faster. The personal luxury goods industry has grown faster. It's growing probably at a high single-digit rate. Luxury boats, cars, hospitality too has grown almost double digits. If you look at our segment, I think we've grown, the CAGR has been in the lower single-digit growth relating to your question as well. Why didn't it grow faster? It's grown, I would say, low single-digit rates over the past three or four years, this segment with a very strong growth post-COVID.
I think a lot of brands saw an incredible growth post-COVID for the first two years. What I would call more of a normalization of the market over the past probably 18 months. Now, the question would be, how do we expect the segment and the industry to grow? That's a little tougher. I think Bain, Alta Gamma has low single-digit, mid-single-digit growth potential over the next three to four years. They see our segment growing. They see it growing. Again, I would say probably mid-single digit, but over a three or four-year period for the reasons we mentioned.
Okay. That's very helpful. Then perhaps on the profitability side, if we compare Vita to BA Fiskars, obviously the gross margins are higher, but at the same time, the OPEX to sales is clearly higher as well.
I was just wondering about the kind of how you see the kind of profitability improvement potential. Is it more like gross margin driven? Is it more kind of sales growth and then leverage on SG&A? How do you kind of see now coming in as a new person in the organization?
I'm going to be very consistent with our Group CFO because it's always a good thing to do that. I agree with what you had mentioned. I think we've got a great foundation now in the brands, in our channels, in our geos that the scaling of our business from a top-line point of view will be one of the big focuses we have. We can continue also to improve some of the gross margins. I hope that's okay to say in time through different ways.
If the brands become even more desirable, we launch fantastic products that surprise our customers, limited editions that there's big queues in the stores and we do not have enough product. I would like that, but not too much, but a little bit. We can make improvements probably in the gross margin as well. For me, it is going to be about top-line development, right?
You see?
We totally agree with you. It is very much about scale, the model, the engine, what we have now built when it comes to gross margin. That, I would say, is pretty much in place, as you said. It is how we can now leverage our cost base there for further profitability.
Actually, what we have done already, and we call it like OPEX fluidity, what we earlier announced this year, that we are saving EUR 10 million there on our cost base, investing in demand creation. We are already making things which are most likely driving top-line as we have discussed.
All right. Thank you.
On the back of Calle's questions on top-line, perhaps I ask one more question here from the web for Daniel. What specific initiatives are being prioritized to reignite top-line growth? Is there anything you can already share with us?
Okay. In addition to what I said on the channels, the geos, and the products, I think the brands have an incredible amount of initiatives happening. I encourage you to ask some questions of our creative directors because there is a lot of great products coming in the pipeline.
Initiatives for me more generically about creating this brand desirability so that we develop the most global iconic brands in the homeware space is first relating to product. To having an incredible pipeline of products coming out, products that surprise our customers as well, bringing some of the icons from the past or the heritage products from the past to life, and then innovating with new products, new products inviting world-class designers to come and interpret our codes as well. I think it's really important to perpetuate that. I think on the product side is really important. I believe also we have to win in social media. It's very important. I think younger consumers learn, discover brands through social media. For me, it's really important. I want to win on Instagram.
We had a conversation at dinner last night with our creative team saying, "We want to win. We can do much better. Our industry could do much better as well." If you look at the followers our brands have on Instagram, it's very low. It should be much higher. There's collaborations also that we need to that we're embarking on, collaborations with either artists, world-class designers, or other brands where we could develop special limited editions. Those initiatives coming up in limited way. You sell them all out and it's finished and it's great. That creates desirability as well. I think there's a lot of initiatives on all of our brands, and particularly this year with Royal Copenhagen because it's our 250th anniversary. We had just an artist collaboration that we showed in the store. Beautiful limited editions, Jasper, of how many pieces? 25.
Incredible artisan pieces, collection pieces as well. I think a good part of them are sold already, very high price, which is good, good margin. We have those types of collaborations that are happening throughout the entire year. Every year, I think on the two seasons, we have a very incredible rich product launch plans that we have. There are just many, many, many initiatives to increase, I would say, the brand desirability, which is for me the most important thing we need to do.
Thank you.
From interest, a kind of a follow-up also to Calle's question kind of on the cost structure. You talk about reigniting growth and category expansions going maybe to new markets, which I guess all needs also some costs to increase.
Do you feel that for you to reignite the growth, you need further upfront OPEX investments in the coming years? Or can that be done without major cost hikes?
Yeah. I'm going to get you to answer that one too. I believe that if we do these initiatives in an intelligent way and using, I go back to the point I made about the advantages of having a portfolio of brands. The example I cited for Korea, where we're a big player in one brand, I think Georg Jensen has a tremendous opportunity in Korea as well. We can scale that business in Korea with minimal resources because we know the trade. I think we have all the four key department stores in Korea. We have a business with them. We have shop and shops there.
If there is a demand, and I think there is clearly for Georg Jensen, we can use that structure to penetrate that market. I think we can do that without, if we were on our own, it would cost more. Being part of a group, I think, is very efficient. We learn from each other as well. Some are experiencing or developing, some brands are launching textiles and other products. We can learn from each other. We can share suppliers as well if it makes sense. I think there is a lot of leverage that we can use internally. Now, some of it will require some additional investments, but it does not have to start from scratch, I would say.
What's really important for me as well as we develop the brands and the businesses is that a guiding principle for me and all the brands is whatever is consumer-facing. Whatever you, the consumer, see, can touch, can feel, can see, that has to be brand-specific. They should not even know Vita is behind it. However, what the customer does not see, this is where we can use the power of the group to leverage our investments in tech, in digital, and other areas as well. Jussi, did you want to add anything to that?
No, you actually covered it extremely well. A couple of keywords here. One is this OPEX fluidity. That is the way we continue. That is what we have done already there in Vita, that we still have potential there to find some savings on our OPEX base.
We are not leaving it on the bottom line. We invest it back in the business to fuel the growth. That is one thing. Some of those investments are almost like this kind of BASU co-model, which means that quite, let's say, light investments there to generate the top line. That is one. Of course, if we start expanding our own direct-to-consumer footprint, i.e., opening new stores, we need to be mindful. Not only opening new stores is the way to increase D2C growth. We need to also improve our in-store excellence. We need to also improve increasing traffic and the likes there. They are not necessarily just new openings, but some small investments there to improve store-specific profitability.
Great.
The second question is that, as you highlight your approach being brand-first, I was wondering what kind of management model do you have in Vita? What kind of management team do you have, Daniel? Or will you have? And what responsibilities does your team have compared to the heads of the brands? Does my team have vis-à-vis the heads of the brands? There are some functions that I think we can create centers of excellence to help the brands. As I often say with my teams now, the brands score the goals. We're a football team. The brands score the goals. They have the lead in a lot of the decisions that affect the experience, the products, and everything else. Part of my team, the non-branded team, let's say, if that's your question, we're there to help the brands score the goals.
The brands are the stars. Our creative directors are the stars. Although they're here, they're very important. But customers, if we're consumer-focused, that's how we have to think about our company as well. We're all there. I would create teams inside the company to help and facilitate our brands to score the goals. Who's scoring the goals is the people in the stores, right? That's where it happens. People in the concessions, people in the stores. In the wholesale channel, we'll have an effort behind brandization, I call it, which is creating spaces for our brands even when we're in wholesale because I want the consumers to come in and be in our brand environment. The people they talk to, if it's not online, are the ones that transmit this history, the artisan nature of our brands, the icons.
It is really important that we enable them to do their work well. That is part of the consumer-centric company I want to create. Great. You shared the percentage of headcount on the Fiskars Group level. Can you give a similar number, how much do you have on Vita level compared to the brand level?
How many in total in Vita?
How many people are working at the Vita group level rather than in the brands?
Yeah. I have a number, but I do not know if we released this.
We have not published.
We have not published. Of course, what we need to remember in Vita, we have own—how many stores did you say? And store personnel there. And then own manufacturing, what we have in Vita. Relative size, we have more people in Vita than we have in Fiskars.
Yeah.
That's the answer. Yes, for that reason. Perfect. Fair enough. Thank you.
Great.
Miller-Mooney from DNB Carnegie. I have a question regarding segmentations within the tableware market. I mean, I obviously think you believe that the luxury part is growing shares in that segment. I guess that's your view. Is that really so? Isn't the low-end gaining shares if you look at the global tableware market? I'm just thinking about my own kids. They are more interested in the cheap stuff. They don't want to have the luxury part.
Yes. I don't have those numbers, but it's a good question. I mean, there's the IKEA as a player. Zara Home is a player. There are players in all tranches of the market. I don't have the numbers on how large that, let's call it the more mass part is and the premium part.
It's a triangle, certainly. And we're playing in the high end of the triangle. We play in the EUR 6 billion industry. I don't have the specific numbers for how big that industry is below, but it's much larger, clearly. Within our niche, we're very confident that there is a capacity to grow in the EUR 6 billion. Customers will evolve as well. I think a lot of our products also are very accessible. If you want to start collecting Georg Jensen, you can start at a very reasonable price point. You can gift Royal Copenhagen as well. A lot of our brands are also accessible in the sense that people can enter in that market. If you look at Denmark and Royal Copenhagen, I'm told everyone that lives in Denmark has Royal Copenhagen in their family. Our challenge is to make this the same in Japan.
China would be important, of course. My answer is I do not know how large it is as a larger market, but our focus is on the top end. We are convinced that there is growth to be had in that top end of the market. Customers will evolve at one point in time, I believe, as well. When they become maybe a little older, maybe have more disposable income, then we want to graduate them into our brands and categories.
Perhaps a couple of questions online. There are a few questions around the topic of the business area separation. Perhaps for this next question, Jyri, you can start, and then Jussi, you can follow. How are you measuring the success of this operating model across Vita and Fiskars?
Jussi had in his presentation basically four criteria that we are trying to address with the separation.
I've been maybe even more focused on my two points in terms of having the decisions that are relevant to be successful in front of the consumers are done as close as possible to the consumer in the businesses. That's the internal which then drives the traditional financial KPIs for these businesses. Obviously, at the same time, and that takes still some time, as Jussi alluded to, when the legal structuring incorporation, that they are also legal subgroups, we are now in the process of splitting certain country legal entities within the group, which have been potentially distributing in a country our, say, garden products from the BA Fiskars and some Vita brands under one legal entity. Those are being split, demerged, and then brought under that structure. That should be finished in Q1 2026.
After that, we have not only the traditional P&L measures, but the entire balance sheet and capital efficiency where we internally can steer it better through transparency internally. First and foremost, that you as the representatives of the investor community will have that transparency and can then judge and basically support that there is a relevant price discovery in the market for our business. Now, my perception is that the market often sees us as a kind of a mixed goods conglomerate. It's maybe a bit too big, but mixed goods shops. That's then difficult to value because the multiples in different industries when you start with outdoor or the garden business and then get to the high-end luxury multiples, that typically these types of companies are valued in the markets are quite different.
When that transparency exists, we are trying to help you guys who are probably the kind of main audience on this webcast and also present here, that you can do that valuation. That should also drive the objective of the company, meaning as the Finnish law is very clearly stating that the purpose of the company is to generate profits or wealth for its shareholders. That is the other driver to be a bit blunt on that legalistic approach.
Do you want to continue?
The ones who have followed us the past four or five years or so, hopefully you have seen that actually we have improved transparency. At least that is what we have tried to do. Hopefully you can have figured it out.
As Jyri mentioned, the next, and I would say the final step is there also that we are clearer when it comes to our capital efficiency, when it comes to our return of invested capital, when it comes to cash flow generation by BAs. Because then you also will figure out that those two BAs, they are quite different from each other. One where we need to focus on growth. One is very, let's say, cash generator already as we speak. Hopefully once we finish this legal entity setup, you will see that they are totally different also when it comes to these kinds of metrics.
Great. Thank you. I think I will take one more question here on the chat, and then we should have time for one more short question if there's anything in the audience. Perhaps for Daniel on U.S.
With only 10% of Vita sales exposed to the U.S., how are you planning to scale in North America? And what roles do tariffs and consumer sentiment play in shaping that strategy?
On the tariff side, as Jussi pointed out, I think our business is only 10% in the U.S. I think the direct impact of the tariffs is a little minimal. We are mitigating for that. The key question is on the indirect impact. A lot of things change every day. We are certainly preparing for that. That is not only a U.S. issue. I think it is a global issue. In terms of our route to market in the U.S., again, it is not the same strategy for all brands. Our biggest brand and historically brand in the U.S. is Waterford.
That has good traction, has good resonance with the consumers in the U.S. I think there's two or three other brands that we will earmark to grow and allocate resources to this market. Now, one of the keys in the U.S. is, in addition to building this brand desirability, also finding the right route to market. I think some of the channels that we've used in the past have changed a little bit. The department stores are having problems in the U.S. If you look at what's happening with Macy's and Bloomingdale's and some of these key department stores, I think there are some changes that are happening in that community. Finding that right route to market is really important for us. These are traditional great partners. We will continue to accelerate there.
I want to make sure our brands are much more visible as well when you enter the department store trade. There are a few other key retailers that we need to partner with as well in the U.S.A. For me, the route to market, the channel of distribution is vital. We will privilege two or three of our brands to first launch in this market. Once we build that success, we can add the other brands to this journey. It is an important market. We have to be present there. We have to be successful in this market. I think our creative director is also working on some initiatives to better correspond to the American consumer. It is a vital market. That 10% will grow.
It's definitely a focus for us among the markets I mentioned this morning: China, Japan, Korea, and other key markets for other brands.
Great. Thank you. Do we have any more questions here in the room? Just very briefly, please.
I think there was clear aspiration to get Vita associated with other luxury brands. I think one definition of the group is they typically drive higher margins than general retail. Now still, Vita's profitability has been somewhat depressed. The question here is that when you want to drive this luxury strategy, are there other ways than growth to hike the profitability from today's levels?
I can take a little bit, and Jussi can add to it. There can be, but we want sustainable long-term growth. That's why it's really the focus will be on the reigniting growth.
We can scale back and reduce some of the cost to serve. As you mentioned, as Jussi mentioned, the big P&L drivers on gross margin and SG&A are different for our businesses, for our BAs. If we want long-term sustainable growth, which is what we want, then I think it's more important for us to focus on the growth of the top line. We can. I mean, we can reduce the cost to serve, but I think it could be too much of a short-term initiative to do so. That is why I think we'll focus. We can do both as well. The answer is not one or the other. I think a lot of the emphasis will be on top-line growth and making our cost structure more efficient as we grow, not only for scale. Also, I think it's important you mentioned luxury.
The impetus I want to give for our brands and our company is not to use the word luxury anymore. For me, what we need to create in our brands is among the most global desired brands in the homeware industry. I want to replace luxury with desirability and have the teams focus on making our brands more desirable. I think it is easier because I think we share some traits of luxury companies, traditional, and then we do not share some traits of those in terms of the distribution model, etc., etc. I think it is more important for all of us to focus on making our brands even more desirable in the future. That will be really one of the focus. I thought I would mention that with your question.
Great. Thank you. That was a good note to end on. That finishes our Q&A session here.
I would like to thank Daniel, Jyri, and Jussi. Now we will invite our creative directors on stage. The panel will begin in a moment. You do not have to yet. Not yet. Yeah. Edmonton? Yeah, Edmonton. Good. Sorry. Hello. We will now begin our creative directors panel. Here to moderate the panel, we have Emily Wilder, Royal Copenhagen's Marketing Director. Go ahead, Emily.
Thank you very much. Thank you, everyone, for joining in today. As Noora said, my name is Emily. I have had the privilege of working at Fiskars for the past 10 years with all these brands. Today, I have the privilege of moderating this talk, which will be on what we just touched upon right before, exploring the role of creativity in creating desirable brands.
With me today and a brilliant panel, I have Paula of Georg Jensen, Janni of Iittala, Jasper from Royal Copenhagen, and Emma of Wedgwood. We are very excited to be able to gather all of you or the four of you here today and dig into this topic, which is fundamental for our brands and their future and future direction. We are looking at the practitioner's role, the creative director's role. And you're practically the ones who are holding the key to the brands right now, to at least have one set of keys. But you'll be the one shaping the brand's future for a period of time. We will be talking about that balance between creativity and commerciality, about heritage and newness, and where you want to take the brands to.
Starting with the role of the creative director, Paula, maybe you could just put a few words to what is the role of a creative director?
Hi. Yes, the role of the creative director is quite a complex one because we touch on so many facets of the business. One might think that we are cocooned in an ivory tower just thinking up colors and really just about shape and design.
Actually, we spend a lot of our time working with the business in understanding what our strategic goals are and creating universes, crafting collections, of course, but also ensuring that all of the facets of the way that we express ourselves are aligned towards one vision so that we are in the end also the guardians of the brand, but also the guardians of the universe, of the expression of each brand and that emotional connection that a brand can have with a customer, which of course then leads a customer to interact with us in a way that is beyond just the transactional, but is actually a lifelong investment and dialogue between a brand, a universe, and a consumer that can last beyond just a season, but a lifetime. We are all proudly guardians of brands that have existed for some of us 250 years, myself 120.
Yeah. No. We're all good friends. Yes, we look at the commercial side of the brand development. We look at the visuals and how to engage customers across all touchpoints. That goes from social media, as Daniel mentioned, to in-store experience, to e-commerce, to collections and collection structure, to actually even down to price points and how a customer can actually—you had a question earlier about how a customer comes into the brand. We also look at structures of product ranges, what would be appropriate for a customer to engage with us at ground level, and how do we graduate them towards some of our brands. Most of our brands have very high-end pieces. For Georg Jensen, we sometimes have silver crafted pieces that go for around EUR 120,000-EUR 150,000. We also have a glass that you could buy for EUR 30.
How can we craft and experience a universe that allows a customer to engage with us across all touchpoints and create a holistic expression of who we are that is beyond just product, but is actually something that is expressing a set of values and a very unique DNA that a customer can identify with? That is a large part of what we do, is really thinking and executing on that full journey of the customer from when they discover us on social media or in a press article down to when they arrive in store and what that experience looks like, what the packaging is. If they order online, what does that journey look like? What does the checkout look like? How do they receive a box? What is that opening journey? Really detail-orientated around brand and experience.
Thank you, Paula.
What role does creative direction play in shaping a brand's commercial success?
I think it's interesting always to turn that upside down and think about what happens or what can happen with brands if you don't have creative direction. It tends to be the case that you then focus on singular products and that you begin as a brand to develop a little function here, a cup for this collection, a plate for this collection, but without a bigger kind of cohesive storytelling. What you end up then is a lot of singular products. They go through the regular product journey. There will be a merchandising team doing the business case. It will go into the design team that will design the product. It goes to the marketing team that will then have to do beautiful storytelling around it.
If it's a very scattered story, you don't get the brand desire. I think the magic really happens when you get all of those people, all of those teams into the same room, into the sort of engine room from the beginning. Everyone works towards one cohesive storytelling. Of course, success for us is not about a customer coming in to buy that one red cup that they've seen a picture of. It's about the longevity of it. It's about the brand desire. It's about creating collectors that continue to come back, not for decades, but for lifetimes. Also, in many cases, for generations.
The homeware industry is quite a traditional one. You come from the fashion industry. Maybe you can elaborate a little bit on how was your experience from fashion? How has that kind of shaped your approach into?
I think just to really build on what Paula and Jesper already said, we all have fashion backgrounds. Fashion is such an incredible industry to be part of. It is so fast-paced. It is dynamic. It is collaborative. The innovation and the creativity is paramount. Really, we are taught throughout our whole careers about everything that has just been spoken about. We are taught how to create collections that have meaningful stories. That is all embedded in the product development. When we kick off a season, for example, we bring all the information to the table. That is not just about creativity. That is also all the data, all the insights, all the market feedback, all the sales information, the overarching business strategy, the brand identity. We bring all that to the table.
We bring also all the ideas, the design ideas, what ideas we want to bring to life, the stories we want to tell, the concepts, the narratives. That creates a framework for us to work around. We start on the journey of development. That is actually the really exciting part because you might start with one idea, and then you go on this undulating journey where it is really collaborative and you are working with factories, suppliers, artists, other members of the team. That singular idea goes on a journey and it becomes something even better because you have all come together to create something meaningful. Ultimately, that, I think, is what we bring because we do not look at product as a singular item. We look at it as an opportunity to tell a story, to create an emotion.
That is ultimately our goal to building that brand desirability that we talk about. Not only that, we get to understand and think about how we bring that story to life in brand imagery, in visual merchandising, how it gets to the consumer, how do we convey all of that emotion that is built up throughout that journey of development to the end piece. It is a really holistic training that we receive in fashion.
The starting point for that, I guess all of the brands have a quite strong DNA. What would you say, just each of you, just in a few words, what is the DNA of each of the brands you are working with?
Wedgewood, I do not know how well you know Wedgewood. I am speaking to the future Wedgewood brand expression that we want to start working on.
I think the first thing for me would be it's a very pioneering brand. Josiah Wedgwood was an abolitionist. He was an innovator. He was an inventor and an entrepreneur. This year marks the 250th anniversary of a material that he actually invented. That's our property, and it's something that we still use to this very day. I would say it's British, but not the caricature of Britain. It's not us all sat around drinking tea in a stately home. It's actually an elegant, eccentric, playful, diverse, multicultural view on Britain. I would also speak to the artistry and the playfulness of the brand because all of our pieces are designed to be enjoyed as pieces of art, but also, and most importantly, we've also always worked with artists from the very beginning of the brand up until the present day.
That was 266 years of building a community with like-minded people.
And how about Royal Copenhagen? Yeah.
Okay, Royal Copenhagen. It's all in the name, really. First of all, royal. It's the royal connection. We were just celebrating our 250th, again, the same numbers, anniversary last month here in Copenhagen. We were founded by a queen. We still have a very close relationship with the royal court. The queen started this year by doing a beautiful cup for us that we launched at the beginning of the year. It sold out in minutes. There's still a really beautiful relationship there. It's such important for us, especially globally, where there's such a big interest in that particular thing. The second part would be the hand-painted porcelain. More than 90% of our collections are hand-painted. That's something that really makes us stand out as a brand.
Finally, the other part of the logo or the brand name, Copenhagen, this links to Danish design tradition, to the equal focus on beauty and functionality, to quality, tradition, and craftsmanship.
Iittala, of course, first and foremost is a Finnish brand. Just like Royal Copenhagen, we are tied into that fabric of Finnish design DNA. What we consider is good design. It is, of course, rooted into the history of modernism and the time after the wars when Finnish design was a great trade asset for Finland as well. We also, of course, respect the values, the certain Finnish way of life, which is important to us. We have a warm, beating heart of glass, artisanal glass, mouth-blown glass, made in Finland in our factory in Iittala, which is about one and a half hours from Helsinki. That is the heart of the brand.
That's where I spend every other week time with the glassblowers. That's where we ideate, we problem-solve, we design, we keep the tradition of those techniques that we have cherished for so many years, for centuries at Iittala. We make sure that those traditions and techniques are still alive for another 140 years. The third thing is that I totally lost my train of thought. I said Finnish. I said the glass. Craftsmanship. Yes. I mean, no, it's the fact that we, of course, always have collaborated with world-well-known revolutionary designers, artists, makers. That is very much embedded into the history of Iittala and also in the future when we embark on this new journey.
For Georg Jensen, we are a house of artist makers. Our founder was a sculptor, first and foremost. He then became a goldsmith.
We have, throughout our history, had a huge, intimate link with artists. Picasso was in our circles and was very prominent in some of the development that we also did in the 1950s. That is a huge part of how we have evolved. We are founded on silver. That is a material that was key to the original expression of Georg Jensen himself. He was also a goldsmith, working in gold and silver. Silver is really running through our veins, as you will see later in the silversmithy. Thirdly, we are rooted in Denmark, but we have movement also in our veins. Georg Jensen was traveling extensively from a very early age. He came from a woodland area just outside of Copenhagen. A lot of his work was focused around nature and the folklore of Denmark.
He was also very outward-looking, traveling as a young student, winning a scholarship from his sculpture to travel and do studies in art in Italy and in France. An expression of Denmark, which is also very curious and, yes, a lot of a rich heritage. In terms of product within this group, I think the jewelry, the fine jewelry, is a key part of what we do still and is one of our foundations.
Thank you. Quite a legacy for all of these brands to sit on. On that topic of heritage versus newness, how do you approach this, Janni? How do you tackle that journey? Yeah, can you say a few words to that?
Our job is to foster a culture where we keep heritage relevant forever. That is one of our key jobs.
Of course, all of these brands that we represent here today have an amazing heritage and history. I believe that it can also become a burden if you do not stay relevant, if you do not keep your finger on the pulse in terms of how you communicate with your consumers in your key markets today and make sure that your strategy in terms of the business and the creative direction and the communication strategy is aligned with that. Of course, we work very hard to recruit constantly new fans to the brand who fall in love with our icons. We love that. We also have, especially in the case of Iittala, a huge responsibility to make sure that we push the boundary of what is considered the future of Finnish design.
We've, of course, are super proud of our most iconic products, such as Aalto Vase, which we discussed earlier here today, which was also born from this hunger to challenge the status quo, what was considered good taste at that time. There is a famous anecdote. I always say that when the vase was launched in 1936, we'll be celebrating 90-year anniversary next year. It was so different to anything that anybody had seen before that the journalists hated it so much that they were throwing it outside of the train windows. It wasn't only until the 1980s when this vase finally started to gain some foothold in the larger audience. I think this is a great example of that pioneering design attitude that we need to follow today. We're not sort of throwing away our heritage and history, but we're being inspired by it.
Every day when we enter into the design studio, we consider those brand codes, the DNA, the values that we represent, and then reinterpret that in the product, in the communication, in the marketing, let it be social media or a campaign or a PR event, and make sure that those codes become relevant today to our consumers. Also, of course, to the younger audience, which we discussed earlier today. It's no secret that we need to make sure that history and heritage that we have is relevant also for the younger audience today in the global platform, not only in Finland.
I assume that's a little bit of a balance, both catering to your existing audience and moving it forward and with consumers being highly engaged in the brand with this history. I know for Royal Copenhagen, being a Dane, it's a cultural institution.
How does that influence you and your work and how you approach the brand?
I think this is such a fascinating one. I'll try to illustrate it with a little personal journey. When I used to work in Paris as a fashion designer, every time I'd come back to Copenhagen, I would buy a small piece of Royal Copenhagen porcelain with me and take it to Paris. I would eat my breakfast from this bowl. It's interesting now, 10 years later, when I'm working for Royal Copenhagen, to think about what it was that pushed me to do that, to try and understand that, to try and understand why it is such a part of the fabric of Denmark. I think it's something about familiarity. It's something about traditions. It's something about having experienced it in your home.
Of course, there's something that's very recognizable also to the brand. I think that we are all faced with this notion of the brands, of people being very emotionally invested in the brands. When you do design something new, you sometimes meet a lot of people who have a lot of opinions. That's a really wonderful thing. You always have to continue to push it, though, so that you continue this legacy of being part of the fabric of Denmark.
Good point. Maybe back to you again, Janni, that balance between driving the commercial side of the business and then driving the creative side. How do you tackle that? How do you still become a commercial brand and solve the problem?
As Paula was describing a little bit of the role of the creative director earlier, I sort of want to go a little bit back into that and remind ourselves that the creative vision is always intertwined with the business vision. Of course, those two coexist. One does not exist without the other. There is a constant collaboration discussion between the business intent and what the creative direction is going forward for. It is about thinking the consumer, category expansion, the portfolio strategy. What are the new materials we want to explore? We want to expand. What are the new markets we want to expand? There is always a balance between emotion and intuition. Of course, that comes from the creative and the data that is, of course, the markets are giving us or the sales teams are giving us.
When we think about how we start a seasonal collection, for instance, of course, it starts from the strong creative concept, which comes from my mind, things that I've seen, things that I've been inspired, things that I want to explore. Alongside that, there is a very insightful business brief that comes from feedback from the sales, from the markets. Okay, this is what we feel that is important for us at this moment. If you only rely on the intuition, you might end up with a product that is perhaps too expensive or it does not work for the distribution or whatnot. On the other hand, if you only rely on the sales figures, you end up with something that is predictable and undesirable. It really is always a balance between these two.
Creativity does not live in its isolation from the rest of the business. They really do conversate with each other.
How about that in terms of how you approach the markets? Maybe Janni can answer to this, the brand storytelling. How do you create a global narrative or a globally relevant narrative? What is that balance between the global and the local?
I think ultimately, it is about creating that community. It is about creating something that people want to be a part of. I think the wonderful thing about being part of heritage brands is not only do we have all these rich stories to tell, but we have these codes that can connect us universally. They are universal languages of craft, innovation, legacy, creativity.
Already, there is a global language that we all speak, but very differently coming from very different places, which I think is something that's really fascinating. On a more sort of practical level, though, it's really important to engage with your local markets. For Wedgwood, for example, our current biggest market is actually China, which is really interesting. My second week of joining the business, I was actually visiting China to understand the cultural nuances, to meet the team, to also just interact with the retail teams, engage with the consumer. It's about understanding those cultural nuances, the consumer behavior, but also how that relates to specific product lines. For example, they set their tables differently there. There are specific product lines that we need to consider. We've just done some of those things this year.
We've done a Bijou set, and we've done a traveling tea set, for example, that is specific to them. It is also about remaining curious and open-minded and respectful and engaging with the design teams and also bringing them along the journey so that actually it becomes part of your design ethos as well. It is not just a one-off. It is actually a constant consideration. You are keeping them part of the communication and the conversation. It is a constant dialogue, I would say.
And for Georg Jensen, you were just recently in Milan. Maybe you can just pass the mic. You are recently in Milan. Why with the pop-up? Can you maybe talk a little bit about that for a global local? Yes. It is also how do we present these new product lines? How do we push the boundaries on what we are doing?
How do we surprise and delight a customer, but also an industry that has seen it all? We were in April in Milan Design Week for Salone, presenting a new contemporary silver collection that's centered around small, beautiful moments. Reimagining silver rather than it living in vitrines, untouchable and only out for special occasions, the idea of silver as tactile and able to frame the smallest gestures of the everyday. We have developed espresso cups, small ice cream spoons, little bowls. Normally, you would go to the ice cream shop and get a cardboard cup. We made that in silver. The little taster spoons that someone, you ask for, can I taste the vanilla, they give you? Normally, that's in plastic. We did those in silver. Rather than presenting that collection at Salone, where normally people do go showroom, we actually opened a Georg Jensen Gelateria.
We called it Gelateria Danese in Italian as a humorous take, selling ice cream and espresso to Italians. Being a Danish brand, it was filled with humor. It was about experience. It really hit a nerve. We had actually from the very first day a queue around the block from 9:00 A.M. to 6:00 P.M. We did not imagine it would have the level of success that it did. I thought it could be a fun thing to do and to present a collection in a different way. Actually, we were also selling product during the event, and we sold out of the product. We sold out of ice cream twice every day. We had to amp up the production of ice cream to satisfy the customer. It is also about, yes, expressing values, expressing a brand vision that is visual, but also certain values which are rooted.
For example, Georg Jensen, he had a lot of humor in the way that he developed. There's a lot of eclectic, almost eccentricity in a lot of the pieces that I find in the archive. Picasso, I mentioned earlier, was a fan and an influencer when we were doing a lot of work in Paris. It is also about finding ways to have people see and talk about your brand in a way that is completely unexpected. In this case, we went viral on TikTok because then it became the affogato of Milan and then became even more crowded. It was like a nightclub that you had to go in.
Those moments, I think we can really engage people in an entirely different way and express a brand in a very surprising way that reaches, yes, the existing customer because it is a story they would not have known, but also a new customer. In that, commercially speaking, structuring that collection so that we are presenting a collection that is made in our silver atelier in Copenhagen in the tradition of 120 years of craft, but actually an entirely modern collection where you can also buy a little spoon as a fun gift for EUR 150.
Yeah. Sorry. It is an excellent example of also how to approach the brands and reach new audiences. Jasper, maybe for you, what do you see as a role or how do you explain what is the role of craftsmanship to the audience of today or to consumers today? What role does that have?
I think you can look at it from two sides, the craftsmanship story. Because on one hand, it's the living part of what we do every day. We're very lucky, all of us, and certainly Royal Copenhagen in having a beautiful factory here in Copenhagen where all our new samples are developed. These model shops are filled with artisans that have worked there in some cases for generations, but some people have worked there for more than 50 years. They're so extremely trained and knowledgeable in their craft. And not just in the craft as it used to be. They're also extremely imaginative, extremely creative. You can kind of throw anything at them, and they'll somehow be able to make that happen. You can say we have the luxury of having craftsmanship, the tactile part of craftsmanship with us on a daily basis.
There is the other side of it, which is the brand storytelling. We see more and more in a digitalized world that people are super interested in how things are made, in things that are handmade. If we post something on social media that is about the craftsmanship, that is about the skills and the artisans, people just go crazy for it in a way that they do not when it is just another beautiful picture of a plate. I think we have the balance of those two. I think we are all extremely lucky that we have the craftsmanship. You will see the silversmith, which is also an incredible place, in a second. It is crucial for our brands, and it is really.
And for consumers still.
And for consumers.
Okay. What about in terms of kind of the future, what is the role of sustainability for our brands?
Emma, do you have a few points on that?
Sustainability is such a complex topic, and we could probably talk about it for several hours if you really wanted to dig into it. It can and should be looked at in many different ways from environmental, social, cultural. I think we can all speak to sustainability in the purest sense. I mean, Wedgwood, as I said, is 266 years old. That is looking at timeless, conscious design. That is something that I think we can all talk about very confidently. There are lots of things that we can discuss. It is not just about materiality. For us at Wedgwood, on an environmental level, we have low-waste production methods where our material is recycled. We are looking at our packaging and making sure that everything is FFC certified. Socially and culturally, we are protecting a community.
We're in a place called the Potteries, known as the Potteries in Stoke-on-Trent. Lots of the factories have unfortunately shut down, but Wedgwood is still going. We're also preserving crafts, which I think, again, is something that we can all speak to, making sure that those skills are passed through generations so that we can protect them. There's the educational side of things. We have the V&A Wedgwood Collection, which is connected to the V&A in London. Again, that's about engagement and telling the stories of artists. On an economic scale, it's also about value-driven product, which is, again, something that we can all speak to. It's a very broad and complex topic, but we all have very tangible things that we are working towards. That's something that we will continue to push and explore. Okay.
Just, yeah, to kind of before we round off, speaking a little bit to the future of the brands, what are the opportunities that you see for each of your brands? Whether it be markets, consumers, development, what is the future direction?
Wedgwood's going through an enormous journey at the moment. I think for myself, the greatest opportunity, I think, is actually we've spoken about it a lot today. It's the connection and the emotional connection with the consumer that we have to reengage because at the moment, it just feels like product on a shelf. We've lost the connection with the charm and the provenance of Barlaston, where product is made, where stories are just so rich. I think that is the greatest opportunity for us. Yes, we have product expansion and great activations that are coming as well.
I want to make sure that through the product, through these activations, through campaigns, all that emotion is embedded in so that we can really start engaging with the consumer, inviting new consumers in to be part of this community because it's a wonderful space. Yeah.
I was lucky enough when I started a year and a half ago to begin to work on this big anniversary year. That gave us a brilliant opportunity to really deep dive into the archives and to really refine what our heritage is and what our heritage collections are. I think it's also giving us the opportunity to create space in the future. Royal Copenhagen has always had really incredible artist and designer collaborations.
These collaborations have been the ones that have really pushed the brand forward, really tested what we can do, really explored new ways of working with porcelain. What we are doing now is creating space in the calendar in the future to do another one of these brilliant collaborations that will talk into the tableware of the times that we live in.
In the case of Iittala, I would like to go back into the DNA, which also I think is the answer to our opportunity. Yes, Finnish brand, but we need to, of course, and we are a globally credible design brand. Finland is a big market for us, but we need to make sure that we penetrate that international design-loving audience also globally. Daniel mentioned earlier about Japan, for instance. Anything from Finland, as you all know, is very interesting in that market.
We need to, of course, jump on that wagon. The second thing, the glass. We want to continue to re-importate the glass and what we can make from glass that goes into category expansions, etc. Thirdly, the collaborative element that we've always collaborated with these revolutionary artists, makers, and designers, and that we also need to continue to leverage to make sure that we bring stories and experiences and products to this global audience that we want to speak to. Of course, younger audience as well, as I mentioned.
Thanks. For Georg Jensen, we have a history which has a wealth of categories, actually. Between 1904 and 1979, we were a fully fledged lifestyle brand, a house of multiplicities. We have, of course, a huge opportunity for growth in the jewelry sector. As Danielle mentioned, it's a $30 billion market that we have a smallish share of.
We have some great launches starting from next year, some quite conceptual jewelry collections that I think will really change the game for us in terms of what our offering is and also the customer engagement in store and online. In addition to that, it's really about looking at our categories from the past. We have done, of course, jewelry. We've done home. Within those categories, we've also had accessories in the past. There are multiple interesting and beautiful things like lipstick cases in the archives and powder compacts and desk accessories and a variety of materials as well in our heritage like wood and silver and steel and glass. I think there is real opportunity there for us to go backwards, actually, to move forward in something that I believe is I have great faith in the growth of this brand in particular.
Brilliant. Thank you.
I think that's all for us today. Thank you all for sharing your thoughts.
Huge thank you to Emily and all our panelists, as well as our presenters before. I also want to thank you all in our audience and also online. If you had any unanswered questions, please do not hesitate to reach out afterwards. With that, we will end the webcast. Thank you and have a good day.